Blanche Lincoln to get tough on derivatives?
Contrary to most everyone's expectations, Blanche Lincoln appears to be developing, well, a really strong set of regulations on derivatives.
According to Politico, she dropped her efforts to cooperate with Sen. Saxby Chambliss (R-Ga.) after he balked at putting standardized derivatives on exchanges. The language she's preparing is now stronger than what appeared in the House bill, the Dodd bill or even the administration's own proposal. Her proposal will regulate foreign currency swaps, which the Treasury Department has opposed, bar "major swaps dealers" from receiving federal financial assistance in the event of a meltdown, and open derivatives dealers to fraud prosecution if they knew their deal could defraud the public.
“Proposals that I have seen from the administration have not gone far enough to prevent bailouts of ‘too big to fail institutions’ and could contain loopholes," Lincoln said. "If we pass reform, it needs to be real reform. My proposal will go further than any other congressional or administration proposal to prevent future bailouts.”
Final judgment will have to wait until we see the actual language, of course. But this is very encouraging, and very unexpected.
Photo credit: Brendan Hoffman/Bloomberg
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